1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION
2 450 N STREET
3 SACRAMENTO, CALIFORNIA
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8 REPORTER'S TRANSCRIPT
9 JANUARY 16, 2014
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14 ITEM P
15 OTHER ADMINISTRATIVE MATTERS
16 ITEM P4
17 PROPERTY AND SPECIAL TAXES DEPUTY DIRECTOR'S REPORT
18 1. EFFECTS OF PROPOSITION 10 ON CIGARETTE AND
19 TOBACCO PRODUCTS CONSUMPTION
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27 REPORTED BY: Kathleen Skidgel
28 CSR NO. 9039
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1 P R E S E N T
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3 For the Board Jerome E. Horton
of Equalization: Chairman
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5 Michelle Steel
Vice-Chairwoman
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7 Betty T. Yee
Member
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9 George Runner
Member
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11 Marcy Jo Mandel
Appearing for John
12 Chiang, State Controller
(per Government Code
13 Section 7.9)
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Joann Richmond
15 Chief
Board Proceedings
16 Division
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For Staff: David Gau
18 Deputy Director
Property and Special
19 Taxes Department
20 Joe Fitz
Chief
21 Research and Statistics
Department
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23 Speaker: Jennifer Clark
Director of
24 Administrative Services
First 5 California
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1 450 N STREET
2 SACRAMENTO, CALIFORNIA
3 JANUARY 16, 2014
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5 MR. HORTON: Ms. Richmond.
6 MS. RICHMOND: Our next item is P4,
7 Property and Special Taxes Deputy Director's Report;
8 P4.1 Effects of Proposition 10 on Cigarette and
9 Tobacco Products Consumption.
10 And I believe we have a public speaker.
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12 JENNIFER CLARK
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14 MS. CLARK: Good afternoon, Mr. Chairman
15 and Members of the Board. My name is Jennifer
16 Clark, and I'm the Director of Administrative
17 Services for First 5 California --
18 MR. HORTON: Welcome.
19 MS. CLARK: -- thank you -- which is also
20 known as the California Children and Families
21 Commission.
22 First 5 California was established as a
23 result of the passage of Proposition 10, and our
24 vision is to see that California's children receive
25 the best possible start in life and thrive.
26 I'm here today to speak briefly on item P4,
27 the Effects of Proposition 10 on Cigarette and
28 Tobacco Products Consumption. The backfill
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1 determination has a direct impact on our funding as
2 well as the revenue received by the 58 First 5
3 county commissions.
4 We met with BOE staff for clarification on
5 the backfill determination and administrative costs
6 charged by BOE because these adjustments are
7 estimated to be $31 million for this fiscal year,
8 which is money that's not making its way to the
9 children -- excuse me, the children of California.
10 We do not object to the backfill or
11 administrative costs; however, as our funding
12 decreases, we need to question any substantial
13 deviation to our budget.
14 Staff did provide us with some information
15 earlier this week, but we just want to let you know
16 that we're going to be looking for more information
17 on BOE's programs and the allocation of costs to
18 better understand the process.
19 Our main concern at this time is that while
20 cigarette and tobacco products tax revenue
21 continually decrease, BOE's administrative costs
22 increase.
23 We do appreciate BOE staff taking the time
24 to meet with us and look forward to continued open
25 lines of communication and the sharing of
26 information pertinent to our agency.
27 That's it. Thank you.
28 MR. HORTON: Thank you very much.
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1 The Board appreciates your testimony as
2 well as your work and would encourage staff to
3 continue to work, not only in identifying the actual
4 cost, but trying to figure out ways to actually
5 reduce our costs, to the extent that we can, and
6 possibly have First 5 assume some of the minor
7 responsibilities, if possible.
8 Thank you very much. We appreciate it.
9 MS. CLARK: Thank you.
10 MR. HORTON: Please introduce yourself for
11 the record and --
12 MR. GAU: Good afternoon, Mr. Chairman and
13 Members. David Gau, Deputy Director of the Property
14 and Special Taxes Department. With me today is Joe
15 Fitz; he's our -- the Chief of the Board's Research
16 and Statistics Section.
17 MR. HORTON: Welcome.
18 MR. GAU: As briefed earlier, the issue
19 before you today is the effects of Proposition 10 on
20 cigarette and tobacco products consumption,
21 otherwise, known as the Prop 10 backfill.
22 Section 130105 subdivision (c) of the
23 Health and Safety Code, as added by the Proposition
24 10, requires the Board to determine the effect of
25 Proposition 10 on the consumption of cigarettes and
26 tobacco products, and then directs that a transfer
27 of funds to Proposition 99 and breast cancer
28 programs be made to backfill for revenue losses to
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1 those programs resulting from consumption changes
2 triggered by Proposition 10.
3 The intent of the backfill is to keep the
4 funding levels of certain Proposition 99 and breast
5 cancer programs from declining any more than they
6 would have decreased without the Proposition 10 tax
7 increase.
8 Based on our economic models, we recommend
9 that a backfill determination of $13.6 million
10 for fiscal year '12 -- 2012/13 be approved by the
11 Board.
12 And at this point, we'd be happy to answer
13 any questions.
14 MR. HORTON: Is there a motion, Members?
15 Motion? No, strike that.
16 Member Mandel.
17 MS. MANDEL: Oh.
18 MR. HORTON: Strike that request. Sorry.
19 MS. MANDEL: Um, I was going to move the
20 backfill.
21 MR. HORTON: Go ahead.
22 MS. MANDEL: Move the backfill.
23 MR. HORTON: All right.
24 MR. RUNNER: Second.
25 MR. HORTON: Move the backfill, second by
26 Member Runner.
27 Without objection, Members, such will be
28 the order. Thank you very much.
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1 MR. GAU: Thank you.
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1 REPORTER'S CERTIFICATE
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3 State of California )
4 ) ss
5 County of Sacramento )
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7 I, KATHLEEN SKIDGEL, Hearing Reporter for
8 the California State Board of Equalization certify
9 that on January 16, 2014 I recorded verbatim, in
10 shorthand, to the best of my ability, the
11 proceedings in the above-entitled hearing; that I
12 transcribed the shorthand writing into typewriting;
13 and that the preceding pages 1 through 7 constitute
14 a complete and accurate transcription of the
15 shorthand writing.
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17 Dated: April 14, 2014
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20 ____________________________
21 KATHLEEN SKIDGEL, CSR #9039
22 Hearing Reporter
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